Dairy farms made up the highest proportion of those farms that had gone into receivership, he said.

"There had been a variety of receiverships across the whole sector including orchards, vineyards, sheep and beef, but dairy's the main one."

He stressed it was still a small number of farms that were in trouble. Ninety per cent of farmers would be fine.

"There are 11,500 dairy farms in New Zealand and we're talking about a handful of those," he said.

The situation was not as dire as some had predicted, Federated Farmers president Bruce Wills said.

"Will some farm businesses fail as a result of lower payouts and a high dollar? Sadly, that answer is probably yes.

"Look, this is a tough season and make no bones about it. Yet tough does not mean dire because we produce food and fibre the world needs."

On the positive side, five of the past six GlobalDairyTrade auctions had been up and in the latest auction wholemilk powder jumped 9.2 per cent.

"This comes off an excellent production start to the new season. I have read that milk volumes are up 13 per cent on last year and last season was one out of the box. I can say from my farm we currently have excellent growing conditions for beef and lamb too."

Farmers needed to look past the short term because the medium term remained bright, he said.